[Things About IPO Subscription in Hong Kong Stocks] What do pink form, white form, yellow form, and blue form mean?
Generally, June and December are peak seasons for IPO subscriptions in Hong Kong stocks, and new shares are usually issued during these two periods. If these two cycles are missed, companies will need to provide additional information such as the latest financial reports, which is extremely cost-ineffective for them.
There are significantly fewer IPOs in July and August. Brother Er Gou took this opportunity to share some insights about Hong Kong stock IPOs. Of course, these are based on his own understanding, and if there are any omissions or misunderstandings, he welcomes corrections from friends. Brother Er Gou thanks everyone in advance!
Recently listed $IFBH(06603.HK) surprisingly and belatedly introduced a pink form subscription. The last time a pink form appeared was for $NEW MEDIA LAB(01284.HK) in 2023...
For seasoned IPO subscribers, seeing a pink form subscription is an absolute delight because it means they can go all-in with margin financing or simply subscribe without hesitation...
So, what exactly is a pink form? In Hong Kong stock IPOs, there are not only pink forms but also white forms, yellow forms, and blue forms. What do these mean?
1. Pink Form
The pink form is specifically for employees of the listed company to subscribe to new shares. Generally, through this method, employees have priority in subscription, and more importantly, the shares are guaranteed. Employees can easily obtain shares, which is considered a benefit from the company.
If a company that provides such a subscription channel for its employees sees its stock plummet after listing, effectively "harvesting" its own employees, wouldn’t the company’s boss fear being beaten up by the employees?
The recently popular coconut water IPO reserved 148,200 shares for employee subscription, but ultimately, 141,600 shares were subscribed, leaving only 6,600 unsubscribed. The final allocation was adjusted to the public offering...
2. White Form
The white form is mainly for public subscription, targeting retail investors. However, white forms can be divided into two types: ordinary white forms and eIPO white forms.
Ordinary White Form: Investors can subscribe without a securities account, directly in their personal name, and will receive a stock certificate. To trade these shares, they must deposit them into a brokerage or bank account.
eIPO White Form: This is the most common method for online subscription, payment, and trading, making the entire process simple and efficient. It is now the mainstream subscription method.
3. Yellow Form
The yellow form is for investors who have opened an account in the Central Clearing System or a securities account with a bank or brokerage. Upon allocation, shares are electronically deposited into the designated account.
4. Blue Form
The blue form is used when a Hong Kong-listed company spins off a subsidiary. Shareholders of the parent company can receive guaranteed quotas for the subsidiary’s IPO shares in proportion to their holdings. This is mainly to protect the interests of existing shareholders.
This is somewhat similar to convertible bonds in the A-share market, where shareholders have priority in subscribing to convertible bonds...
When China Literature listed in 2017, as a wholly-owned subsidiary of Tencent, shareholders who held 1,256 shares of Tencent were entitled to 1 share of China Literature...
Taking $CHINA LIT(00772.HK) as an example, which listed in Hong Kong in November 2017, it is a subsidiary of $TENCENT(00700.HK). At the time of listing, for every 1,256 shares of Tencent held, shareholders were entitled to 1 share of China Literature.
That’s all for now. Brother Er Gou will continue to gather information and keep this column on Hong Kong stock IPOs going. Thank you for your support and likes~~~
Follow Brother Er Gou for a smooth journey in Hong Kong stock IPOs~~~
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